Accounts Receivable Aging Report

What the buckets mean

Every accounting system produces an aging report on demand. The standard buckets are Current (not yet due), 1-30 days past due, 31-60, 61-90, and 90+. Each bucket represents money you're owed and a probability of actually collecting it.

Industry collection probabilities are roughly: Current ~98%, 1-30 days ~94%, 31-60 ~85%, 61-90 ~70%, 90+ ~50% and falling fast. By 180 days the probability drops below 25% — which is why aggressive follow-up in the first two buckets matters far more than chasing six-month-old invoices.

How to use it weekly

Run the aging every Monday. Calculate the percentage of total AR sitting in each bucket. A healthy service business keeps 75%+ in Current and under 5% in 90+. If 90+ creeps above 10% the business has a collections problem masquerading as a sales problem.

Pair the aging with concentration analysis: which customers account for the largest overdue balances? Often a single late-paying enterprise client distorts the entire metric, and the right action is a direct call to AP, not a generic dunning letter.

Reading an aging report

A clean aging report has 90%+ of the dollar balance in the current and 1-30 buckets. The 31-60 bucket is the early-warning zone — anything sitting there has missed at least one payment cycle and needs an active collections touch this week. The 60+ buckets are where bad debt is born; assume 10-25% of dollars over 60 days will eventually require concessions, payment plans, or write-offs.

Track aging concentration, not just totals. A $200k AR balance with one $50k customer in 90+ days is a different problem than the same $200k spread evenly across 40 customers. Single-customer concentration over 25% of AR is a balance-sheet risk that should drive credit-limit conversations and possibly customer diversification efforts.

Run the aging report at month-end and again mid-month. The mid-month report catches deterioration before close-out reporting masks it; many businesses are surprised at month-end because they only look monthly and miss the build-up. A weekly aging review with the collections owner is the gold standard for any business with more than ~50 active customers.

Once the aging report is in good shape, share it with the sales team monthly. Collections is much more effective when account owners feel personal accountability for receivables rather than treating it as 'finance's problem.' The cultural shift — from 'we sold it, you collect it' to 'the deal isn't done until cash is in the bank' — is one of the highest-leverage finance-team interventions available.